Netflix (NFLX) shares have been on a mini-rollercoaster after reporting second quarter earnings results after Thursday’s market close, the streamer beating estimates and revealing it added 8 million subscribers. The company did miss on Wall Street expectations for third quarter earnings guidance though.
Starting in 2025, Netflix will not use subscribership as a growth measurement when reporting earnings.
TD Cowen managing director John Blackledge joins Morning Brief to give insight into Netflix’s recent performance. how its new initiatives aided in the company’s second quarter performance, and outlines what can keep the momentum going for Netflix
“Management said last night, we just talked about the big margin expansion this year, they expect margins to continue to rise next year and going forward, free cash flow rising, stocks trading at about 27 times earnings,” Blackledge says about the earnings call.
“We think some of those factors that I just mentioned could drive a multiple expansion. And what I’d also point out is on the ad tier, I thought they were pretty bullish on the long term. And also kind of on the near term. They expect the ad tier to reach critical scale by next year in all 12 of the AVoD [Advertising-based Video on Demand] markets.”
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